Over 100 prominent economists have warned about the potential election of the radical rightwing economist Javier Milei as the President of Argentina. They have expressed concerns that his policies could lead to further economic “devastation” and social upheaval in the South American nation. In a publicly released letter ahead of the crucial November 19th election in Argentina, these economists acknowledged voters’ deep desire for economic stability, given the country’s history of financial crises and high inflation.
Currently, four out of every ten citizens in Argentina live in poverty, and the annual inflation rate is nearly 140%. Milei, in his bid to defeat his rival, Argentina’s Finance Minister Sergio Massa, has proposed drastic measures, including abolishing the central bank and dollarizing the economy. However, the economists caution that while Milei’s seemingly straightforward solutions may be attractive, they are likely to cause immediate damage in the real world and limit policy options in the long term.
The economists, including influential figures like Thomas Piketty from France, Jayati Ghosh from India, Branko Milanović of Serbian-American descent, and former Colombian Finance Minister José Antonio Ocampo, argue that Milei’s proposals, despite being presented as a radical departure from traditional economic thinking, are rooted in laissez-faire economics and carry substantial risks that could harm the Argentine economy and its people.
Milei, a self-described anarcho-capitalist, has campaigned to reduce subsidies, significantly cut state expenditure on social programs, and controversially declare “taxes are theft.” While these positions have garnered attention, the economists in their letter contend that a major reduction in government spending could exacerbate poverty and inequality, potentially leading to increased social tensions and conflict.
In particular, Milei’s advocacy for dollarization and fiscal austerity is criticized for oversimplifying the complexities of modern economies, disregarding lessons from historical crises, and worsening existing inequalities. Development economist Jayati Ghosh and co-authors Piketty and Milanović expressed concern that Milei’s policies could inflict serious damage on Argentina and the entire continent, highlighting the potential for both social and economic chaos.
As the crucial election date approaches, Milei once considered the frontrunner, has faced challenges but gained endorsements from prominent conservatives, including former President Mauricio Macri. On the other hand, Massa emphasizes the economic shortcomings of his opponent’s Peronist movement, which has held power for a significant portion of the past two decades.
In the campaign’s final stretch, Milei is urged to focus on his opponent’s economic track record, while Massa is expected to highlight Milei’s volatile character and present him as an “extravagant, angry, crazy” loose cannon. Despite these efforts, the election outcome remains uncertain due to Argentina’s ongoing economic difficulties.
Milei’s controversial views, such as his strong disapproval of the economist John Maynard Keynes and his combative exchanges with economists like Piketty, add to the polarization of the campaign, but his supporters see him as having an edge in the race.